Electricity:

According to a recent report by the Energy Information Administration, natural gas production is nearly in line with coal production, producing almost the same number of megawatt-hours of energy. What could this trend mean for the future of renewable energy electricity and transmission? During today's OnPoint, Jimmy Glotfelty, co-founder of Clean Line Energy Partners and the former director and founder of the Department of Energy's Transmission Office, discusses the challenges of transmission planning as the dynamics of the natural gas and renewable energy markets continue to change. He also discusses the details of his company's proposed transmission line that would bring wind power from Iowa to Chicago.

Transcript

Monica Trauzzi: Hello and welcome to OnPoint. I'm Monica Trauzzi. Joining me today is Jimmy Glotfelty, cofounder of Clean Line Energy Partners and the former director and founder of the Department of Energy's Transmission Office. Jimmy, thanks for coming on the show.

Jimmy Glotfelty: Thank you for having me.

Monica Trauzzi: Jimmy, according to a recent EIA report natural gas production is nearly in line with coal production, producing almost the same number of megawatt hours of power. As someone who works specifically on the transmission of renewables, how do you think this trend could impact the future of power from renewable energy?

Jimmy Glotfelty: Well, I think the low gas prices that we're seeing today are not going to stay around forever. I think universally folks believe that the prices will go up from the $2.50 range to the five to the six dollar range. So, as we historically know, natural gas is volatile. That's the price. It's good for economic development and it's good for consumers when prices are low. So it's having an effect where it's hurting renewable development today, but we are building long-term transmission. It's a long-term asset, so we have to look in the long term. So we believe that, you know, as we look down the curve of gas prices that they come back in line and we believe that renewable energy production, as well as our transmission line, will be fine, you know, as these prices come back in line.

Monica Trauzzi: So, when you look long term, what percentage of the energy makeup do you think natural gas will play?

Jimmy Glotfelty: Ultimately, it's probably going to be in the 30 to 40 percent, coal is in the 50 to 60 percent range now, so, you know, you're probably going to get ultimately, you know, 15 percent renewables, 20 percent renewables, and that's all renewables, and you're going to have-you know, kind of the rest of the pie is going to be divided between, you know, nuclear, gas, and coal.

Monica Trauzzi: Some folks believe that cheap natural gas is a bad thing overall for the market. What's your take?

Jimmy Glotfelty: I think low natural gas prices are good for the consumer. They're good for economic development and as long as the fuel prices are passed through to the consumer, then that's a good thing. You know, utility executives that, you know, have to serve the public, they don't believe-most of them don't believe that prices are going to stay as low as they are today either. So they don't want to go all in on natural gas. They want to have a balanced resource and there, obviously, is a big place to play for renewables.

Monica Trauzzi: So, it does seem like there are so many rapidly changing dynamics to the market at this point. How does transmission keep up with that?

Jimmy Glotfelty: You know, that's really good question. Transmission is kind of the delivery system for energy. Uniquely, all of the other types of resources can be built fairly close to loads. Wind is the anomaly to that and, you know, you have to go get it and move it to load. So, transmission, it's a long-term asset. It has to be planned in the long term and it takes a long time to develop, so it is-as we develop, you know, we have to look towards kind of the long-term prices, the long-term RPSs that have been passed in different states and see how the mix will look when you take those into consideration.

Monica Trauzzi: So, let's talk about some of the work that your company is doing. FERC has given you permission to start signing customers up for your proposed transmission line that would carry wind power from Iowa to Chicago.

Jimmy Glotfelty: Correct.

Monica Trauzzi: How much of a challenge is there when you're trying to build these cross-state transmission lines?

Jimmy Glotfelty: We haven't made it easy as a country to try to build transmission lines. The way we site transmission lines is state-by-state. So, when you're doing a multistate project you have to go through each state's regulatory regime and, quite frankly, Iowa and Illinois are very different. But we believe, as an independent transmission company, that we can navigate both of those state regulatory regimes and be successful in siting the transmission line across those states. We believe that there are other states that are much harder to navigate than Iowa and Illinois and we've got great support not only among landowners, but among wind companies and suppliers as well. And the political leadership of the states have been very, very supportive.

Monica Trauzzi: So, more broadly speaking then, how would you qualify the state of clean energy transmission in the United States?

Jimmy Glotfelty: Continually growing. I think if you look at most of the big transmission planning activities that are going on, whether they be at the regions or kind of the Eastern Interconnect Planning Collaborative, which is a DOE funded project, they are all looking at renewables and how the transmission system needs to be built out to include more renewables.

Monica Trauzzi: So we talked about wind. We've heard from many CEOs, both on this show and testifying on the Hill, that without tax credit extensions many of them will have to close up shop. So, from your perspective, is wind a viable source of energy and is it a strong economic driver?

Jimmy Glotfelty: I think the answer is yes to both of them. First of all, as an economic driver, in this day and age when we have a struggling economy, about 60 percent of wind turbine components are built here in the U.S. That's up from 20 percent about a decade ago, so it is a jobs program. It is jobs in all of the states-in most of the states in the United States. Wind energy is becoming much more efficient, so even without the PTC, it is becoming close to parity with other resources. The PTC is an important component of the price today. Turbines are getting taller and the blades are getting longer and that allows them to produce more energy for the same capital cost and that's what's driving down the price of wind energy. As we go to even taller turbines and longer blades, you will see the price go down even more.

Monica Trauzzi: So, if there is no PTC extension, what could that mean for the future of your project?

Jimmy Glotfelty: Well, again, we take a long-term view. We think that wind prices will continually come down as technology changes. We are not looking at a two-year PTC. In our company we're looking at a five or a six year project, so we hope that they're around. We don't know if they will be, but we think that efficiencies will perhaps overtake the cost of the PTC over time.

Monica Trauzzi: What are your projections for the cost of energy that's going to be traveling down these transmission lines to folks in the Chicago area?

Jimmy Glotfelty: Well, we have-the areas that we call the resource areas where the wind turbines would go, it is a fantastic resource. Contracts are getting signed in the three cent range, three cents per kilowatt hour. Transmission will be about two cents, so five cents a kilowatt hour is a very, very competitive price, competitive, in fact under the cost of new coal and new nuclear plants.

Monica Trauzzi: All right, we'll end it right there. Thank you for coming on the show, nice to see you.

Jimmy Glotfelty: Thank you so much.

Monica Trauzzi: And thanks for watching. We'll see you back here tomorrow.